Project On Fringe Benefits

Study to determine the impact of fringe benefits on job satisfaction
Project Title: Study to determine the impact of fringe

benefits on job satisfaction
MBA - HR
ABSTRACT
The study addresses the impact that fringe benefits have on the levels of job
satisfaction and engagement of the employees of Galaxy Mining Services. Galaxy is a
global explosives company that serves the mining and construction industries all over
the world. The remuneration of employees differs from country to country within the
organization and this can lead to confrontations when employees compare
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remuneration packages amongst one another. To determine the appropriate

compensation for the value of the work becomes even more difficult when dealing with a
global organization. This matter becomes even more complicated when an
organizations boundaries stretch across country borders. The study aims to compare
job satisfaction and engagement of Galaxy employees working in India.
A survey research design was used with a specifically developed questionnaire as the
data gathering instrument. The participants represent the total of all employees of
Galaxy, a global mining services company. Management supported the study and made
participation compulsory. A total of 57 employees completed the questionnaires.
Employees from different areas, gender, age, academic levels and income groups
participated. The majority of the respondents were in the age group 36 40 (28.1%).
Educational levels revealed that the majority (68.4%) of participants have a Grade 12
and/or higher qualification.
Because all the questionnaires represented the population and not just a sample, only a
test to determine practical correlation was performed. For the purpose of the correlation
test, the Nonparametric Spearmans correlation coefficient (r) was used.
The statistical analysis indicated a highly important correlation between Job Satisfaction
and Engagement. Thus a high level of job satisfaction will imply a high level of
engagement and vice versa. It has also indicated that Job Satisfaction and Fringe
Benefits shows a low practically significant correlation. The test for correlation between
Job Satisfaction and Remuneration indicated that the level of job satisfaction an
employee experiences in the organization is influenced by his remuneration package.
The test for correlation between Engagement and Fringe Benefits shows a low
practically significant correlation. The test for correlation between Engagement and
Remuneration shows a low practically significant correlation.
The limitations of the study were the limited number of employees in Galaxy India for
participation in this comparative study. The structure of remuneration packages is
treated as confidential and therefore employees might be hesitant to answer questions
regarding fringe benefits and remuneration. The study was conducted within Galaxy and
therefore its outcome can only be released with the permission of Galaxy India.
INTRODUCTION
This mini-dissertation focuses on a comparative study to determine the impact of
fringe benefits on job satisfaction and engagement.
Fringe benefits, or that part of the total compensation package other than pay for
time worked provided to employees in whole or in part by employer payments, play
a major role in the structuring of compensation packages (Williams, 1995:1097).
If asked about their organizations compensation programs, most managers criticize
them as not working (Jensen & McMullen, 2007:2). This statement reflects the
opinion of various managers in the corporate world, as they are powerless with
regards to the compensation of their employees and the limitations which are
placed by the laws of the organization on the structuring of their employees
remuneration packages.
Managers have the authority to make major business decisions sometimes worth
millions of Rupees, but they dont always have the authority to change the structure
of their employees remuneration packages (Jensen & McMullen, 2007:2). Most
remuneration packages are based on market related information, and one can ask
the question do these market related rewards reflect the contribution that a
specific employee makes to an organization? (Jensen & McMullen, 2007:2).
Todays managers do not believe that their organizations compensation programs
are effective in getting the desired results for which they are held accountable
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(Jensen & McMullen, 2007:2). For most managers, compensation is their largest
controllable operating expense. If it is successfully managed, the compensation
offered to employees gives them a great tool to achieve the best possible business
results.
When managers or employees criticize the organizations remuneration packages or
reward structures, it is often assumed that money is the reason. But people or
employees are motivated by more than just money. According to Jensen and
McMullen (2007:5), some people say that money is not a motivator for them at all.
According to McCaffery and Harvey (1997:1), there are six key reasons why
remuneration packages need to be structured, and why fringe benefits will not be
eliminated.
Its the law: Certain fringe benefits are required by law. In the United States Social
Security, Medicare, and Family and Medical Leave are mandated federally. All the
states require workers compensation coverage and unemployment insurance. A
few states have non-occupational temporary disability benefit laws and mandatory
health benefit coverage.
Duty to bargain with unions: Virtually every conceivable employee benefit qualifies as
a mandatory subject for bargaining under federal labour law. This means that in
collective bargaining, employers cannot ignore union proposals or eliminate benefit
coverage unilaterally.
Competition: Even most small employers now sponsor some benefit plans for their
employees if only paid-time-off allowances and employee-pay-all coverage. A
company opting for an all cash compensation program certainly would be
disadvantaged competitively in the employment marketplace.
Benefits are tax-advantaged: Unlike pay, which is subject to federal and state taxes,
most benefits enjoy either a tax-exempt or tax-deferred status. This enables
employers to take current-year tax deductions for expenditures without directly or
immediately increasing employees taxable income.
Employees want benefits: Employees are accustomed to receiving benefit coverage

as part of their total compensation. They realize that because of tax advantages
and economies-of-scale, they are better off having their employers provide benefits.
This is evident especially in flexible (cafeteria) plans where most employees forego
cash pay-outs for benefit choices.
Benefits support employer strategies: Companies find that certain benefits are often
more effective than pay in helping to achieve objectives related to recruitment,
retention and motivation of employees, cost management, and social responsibility.
Examples of this are profit-sharing plans, work-and-family programs and flexible
benefit plans.
The bottom line is every organization is different different employees with
different cultures, different needs and different objectives (Jensen & McMullen,
2007:157). Effective benefits will align employee needs with the organizations
goals, and this is based on careful research into what employees want what the
organization offers, what it wants to offer, and ultimately what it can afford to offer.
PROBLEM STATEMENT
The study addresses the impact that fringe benefits have on the level of job
satisfaction and engagement of the employees of Galaxy Mining Services. Galaxy is
a global explosives company that serves the mining and construction industries all
over the world. The remuneration of employees differs from country to country
within the organization and this can lead to confrontations when employees
compare remuneration packages amongst one another. The study aims to compare
job satisfaction and engagement of Galaxy employees working in India.
To determine the appropriate compensation for the value of the work becomes even
more difficult when dealing with a global organization. This matter becomes even
more complicated when an organizations boundaries stretch across country
borders. It is therefore important to compensate employees according to the market
value in each individual country as well as keeping in mind cultural diversities when
remuneration packages are structured.
Job satisfaction can only exist when the interests of both the employee and the
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organization are in equilibrium. The organization relies on the manager to evaluate

the value of the work performed by an employee, and with the interest of the s at
heart, to determine the appropriate remuneration for this work. In order to offer the
employee compensation which is competitive with other companies and
appropriate for the employees duties, the manager needs to have an in-depth
understanding of the real value of the work.
RESEARCH OBJECTIVES
The research objectives are divided into general objectives and specific objectives.
General objectives
The general objective of this research is to determine the impact of fringe benefits
on job satisfaction and engagement for employees working for Galaxy in India.
Specific objectives
The specific objectives of this study are:
To determine the importance of fringe benefits amongst employees

To determine the impact of fringe benefits on employee engagement
To determine the impact of fringe benefits on job satisfaction
To gain better knowledge of the structuring of remuneration packages
RESEARCH METHOD
The research method consists of a literature review and an empirical study.
Literature review
The literature review focuses on the structuring of remuneration packages, fringe
benefits and their impact on job satisfaction and engagement.
Research design
One of the most popular and effective measurement tools to determine the impact
that fringe benefits have on job satisfaction and engagement is a research survey.
Therefore, a questionnaire was designed specifically for Galaxy employees to obtain
information regarding their perceptions on job satisfaction, engagement,
remuneration and benefits. A questionnaire of four sections was developed. Section
A consisted of fifteen questions regarding job satisfaction. Section B consisted of
fifteen questions regarding engagement. Section C comprised of fifteen questions
about fringe benefits and remuneration. Section D consisted of seven questions
regarding the participants biographical information. The participants, all Galaxy
employees, were informed that the purpose of the questionnaire was to gather
responses on how they perceived the impact that remuneration packages and fringe
benefits have on job satisfaction and engagement.
Participants of survey
The participants represent the total of all employees of Galaxy, a global mining
services company. Participation was supported by management and made
compulsory. All 57 employees completed questionnaires that were collected for
analysis. Employees from different areas, gender, age, academic levels and income
groups participated. The majority of the respondents were in the age group 36 40
(28.1%). Educational levels revealed that the majority (68.4%) of participants have
a Grade 12 and/or higher qualification.
Measuring instrument
Questions were answered based upon the five-point agreement-disagreement Likert
format, varying from strongly agree to strongly disagree. However, for the purpose
of this study, the scaling was adapted to a four-point scale to force the participants
to select a definite opinion rather than choosing the middle option of Neither agree
nor disagree. Likerts scaling is based on a bipolar scaling method.
The questionnaire comprised of four sections. The first part consisted of fifteen
statements directly related to job satisfaction. The second section had fifteen
questions about the organizations commitment towards the participant, and the
third part contained the last fifteen statements regarding the remuneration and
benefits that participants receive at Galaxy. Questions in the last section were
specifically included to gather demographic characteristics of the participants such
as gender, nationality, age group, residential area, academic background and years
of service at Galaxy.
Data analysis
The statistical analysis was carried out with the assistance of the Statistical
Consulting Services of the North-West University (Potchefstroom Campus). The
Statistical Version 9.1 (Statsoft, 2005), SPSS (SPSS Inc. 2009) and SAS (SAS Institute
Inc., 2005) programmes were used.
RESEARCH PROCEDURE
Responses were gathered from participants on all the items of the questionnaire.
Participants consisted of employees of Galaxy who are working in Mumbai, Delhi
and Delhi. All responses were used for data and statistical analysis.
LIMITATIONS
It was anticipated that a limited number of employees in Galaxy India would be
available for participation in this comparative study. The structure of remuneration
packages is confidential and therefore employees might have been hesitant to
answer questions regarding fringe benefits and remuneration. The study was
conducted within Galaxy and therefore the outcome of the study could only be
released with the permission of Galaxy India.
The level of literacy in India differs immensely and therefore the completion of
questionnaires by certain individuals might have been problematic, and could
require the services of a translator.
DIVISION OF CHAPTERS
The chapters in this mini-dissertation are presented as follows:
Chapter 1: Introduction, problem statement and objectives Chapter 2: Literature
study Chapter 3: Research methodology Chapter 4: Conclusions and
recommendations
CHAPTER SUMMARY
This chapter discussed the problem statement and research objectives. The
measuring instruments and research method used when doing the research were
explained. A brief overview of the chapters followed.
LITERATURE STUDY
A thorough literature study needs to be conducted to form a complete
conceptualization of the terms job satisfaction, engagement, fringe benefits and
remuneration. For the purpose of clarification the following definitions will be apply
to this study.
DEFINITIONS
For the purpose of this research, terms used in the chapter are defined as follows:
Basic Salary: This is the cash compensation that the employee receives for the
duties that he performs. This component normally reflects the value of the work
that is performed and does not reflect the experience or performance of the
individual.
Car Allowance: This includes the benefit to the employee of a cash component in his
salary for the purpose of buying and maintaining a vehicle suitable for performing
his duties, or the use of a company vehicle that would assist him in performing his
duties, or the use of a pool vehicle that would assist him in performing his duties.
Contract Employee: Defined in the Galaxy Conditions of Service as employees
engaged for a stated period of time with or without an option for renewal.
Employee: Defined in the Practical Guide to Remuneration Packaging as:
i)
Any person (other than a company) who receives any remuneration or to

whom any remuneration accrues.
ii)
Any person who received remuneration or to whom any remuneration

accrues by reason of any services rendered by such person to or on behalf
of a labour broker.
Employer: Defined in the Practical Guide to Remuneration Packaging as any person

who pays or is liable to pay to any person any amount by way of remuneration, and
any person responsible for the payment of any amount by way of remuneration to
any person under the provisions of any law.
Family of an employee: Defined in the Galaxy Conditions of Service as the employee,
one spouse and a maximum of four unmarried children or dependants until they are
no longer dependant. These, however, must be registered with the company.
Children or dependants who have offspring of their own will be automatically
excluded from any benefits.
Gross income: Defined in the Practical Guide to Remuneration Packaging as in
relation to any year or period of assessment means:
1) In the case of any resident, the total amount, in cash or otherwise, received by or
accrued to in favor of such resident; or
2) n the case of any person other than a resident, the total amount, in cash or
otherwise, received by or accrued to or in favor of such person from a source within
or deemed to be within the Republic.
Group Life Insurance: This includes the contribution that the employer pays
on behalf of the employee for the purpose of life insurance or disability
insurance of the employee whilst the employee is performing his duties.
Housing Allowance: This includes the cash component that the employee
receives
for
the
purpose
of
contributing
to
the
rental
of
suitable
accommodation, or the contribution to paying for his own accommodation.

Medical Aid Contribution: This includes the contribution that the employer
pays on behalf of the employee for the medical aid cover of the employee as
well as his immediate family members that are also covered by this medical
aid cover.
Pension: It is defined in the Practical Guide to Remuneration Packaging as an
annuity payable under any law or under the rules of a pension fund or
provident fund or by an employer to a former employee of that employer or
to the dependant or nominee of a deceased person who was employed by
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such employer.
Pension Fund Contribution: This includes the contribution that the employer
pays on behalf of the employee for the purpose of having a pension fund or
provident fund, or any fund or insurance that has the same intend, for the
employee.
Permanent Employee: Defined in the Galaxy Conditions of Service as
employees
engaged
with
view
to
long-term
employment
in
the
organization.
Remuneration: The term remuneration as explained in the Practical Guide to
Remuneration Packaging, includes salary, advances to directors, leave pay,
allowances, overtime pay, bonuses, taxable section 8A, 8B and 8C share
options, disposals and gains, commissions, gratuities, pensions, annuity and
retirement payments and any of the special taxable benefits described in the
Seventh Schedule. The term remuneration excludes amounts or benefits
received in a trade carried on independently, that is, with no control or
supervision of the manner in which the duties are performed or of the hours
of work, provided payment is made at irregular intervals. A director of a
company is specially deemed to be in receipt of remuneration for the
purpose of fringe benefit tax.
Salary: defined in the Practical Guide to Remuneration Packaging as salary,
wages or similar remuneration payable by an employer to an employee, but
does not include any bonus or any other amount.
Temporary Employee: defined in the Galaxy Conditions of Service as
employees engaged for relatively short periods of time, for particular jobs or
assignments, the duration of which is not stated, and whose services may no
longer be required on the completion of the particular job or assignment.
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JOB AND BENEFIT SATISFACTION

As a manager in the modern organization, one must be fully aware of the diverse
cultures in the organization as well as the human resources practices needed to
establish the best workable solutions for an optimal reward strategy. If one has all
these aspects successfully implemented in the organization, it would ultimately lead
to better individual and organizational performance (Jensen & McMullen 2007:38).
How can a manager reward individuals within the guidelines of a company without
jeopardizing
the
companys
reward
guidelines?
There
is not
one
suitable
remuneration structure that is suitable for all industries and all organizations across
a broad spectrum of businesses. What works for a certain company would not
necessarily work for another company.
The manager cannot force people to perform nor can he satisfy all their needs, but
he is, however, able to create a motivating climate in which his employees are
motivated to perform well and to experience job satisfaction (Coetsee, 2003:58).
According to Milkovich and Newman (2005:272), some of the advantages of a
successful compensation structure are:
People join a firm because of pay structures

People stay in a firm because of pay structures
People agree to develop job skills because of pay
People perform better on their jobs because of pay
Most well-known theories on the principle of motivation revolve around the idea that an
employees needs influence his motivation. An employees needs could be
characterized as physiological or psychological deficiencies that trigger specific
behavior from the employee. The needs of employees could vary over time and place
and are subject to the influence of external and environmental factors. This implies that
people will react to satisfy those needs that are not fully satisfied (Kreitner & Kinicki,
2007: 236).
Maslow & Herzbergs Theories of Needs
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One way to understand and motivate the employee is to revisit Abraham Maslows
Hierarchy of Needs (Maslow, 1954). Maslow created a visualization of his hypothesis in
the shape of a pyramid that is divided into five levels, starting from the bottom upwards,
and the needs could be described as:
Physiological. The most basic need, having enough food, air and water to survive. In
the business context this could imply the employees salary, air conditioning in the
office, or the availability of a cafeteria at the work place.
Safety. The need to be safe from physical and psychological harm. In the business
context this could mean the possibility of a salary increase, a pension plan, hospital and
medical plans or disability insurance.
Love. The desire to be loved and to love. It contains the need for affection and
belonging. In the business context this could mean employee-centered supervision,
personal and professional friends, office parties or social gatherings.
Esteem. The need for reputation, prestige and recognition from others. This includes
the need for self-confidence and strength. In the business context this could mean the
employees job title, office furnishings or deserved salary increase.
Self-actualisation. The desire for self-fulfillment - to become the best one is capable of
becoming. In the business context this could mean advancement for the employee,
challenging assignments, development opportunities, or opportunities to use ones
skills.
Maslowws Needs Hierarchy is illustrated in Figure 1 below:
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Herzbeerg (19755) suggested a two-step framework to understand employee

motivation and satisfaction. His theory was developed too explain employee
reaction to their work and the work environment. Herzbeerg highlighted that
all factors could be categorized in two groups. The first group is called
Hygiene or Maintenance factors, and thee second group is called the
Motivating factors.
Herzbeerg theory is illustrated in Figure 2 below:
Motivating Factors:
Motivating factors could lead to an individuals need for personal growth.
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When in existence, motivating factors could easily contribute to job

satisfaction. When it is most effective, it could motivate an employee to
perform
above
average
and
above
expectations.
Herzbergs
(1975)
motivating factors could include:
Status
Opportunity for advancement
Gaining recognition
Responsibility
Challenging / stimulating work
Sense of personal achievement & personal growth in a job
Herzberg (1975) proposed that when hygiene factors are lacking in the workplace, the
employee will experience dissatisfaction or unhappiness. However, when these factors
are present, the employee does not necessarily experience satisfaction. The employee
simply does not feel dissatisfaction. When motivating factors are present, the employee
feels satisfied.
Hygiene Factors:
Hygiene factors are based on the needs of the organization in order to
prevent unpleasantness in the working environment. When employees are
under the impression that these factors are inadequate, it could lead to
dissatisfaction in the work place. Herzbergs (1975) hygiene factors could
include:
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Company policy and administration

Wages, salaries and other financial remuneration
Quality of supervision x Quality of interpersonal relations
Working conditions
Feelings of job security
There are certain similarities between Herzbberg's and Maslow''s theories. Both suggest
that certain needs have to be satisfied before an employee can be motivated. Figure 3
below illustrates the comparison between Maslowws and Herzbeergs theories:
Figure 3 - Maaslow Hierarchy of Needs vs Herzbergs Motivation Hygiene Theory
Given these need theories, the question could be asked: How does the manager
motivate his employees with the influence allocated to his authority? The answer
would lie in his ability to make employees feel secure, needed and appreciated.
These models of Maslow and Herzbeerg present a means to understand the needs
of the employees. According to these theories, every employee could react
differently to his remuneration package, depending on the specific phase he is in his
life, as well ass the conditions he experiences at work. Different employees have
different expectations from the remuneration given by the employer.
These expectations are guided by the customary remuneration packages paid by
organization in the country and the cultural ethnics of thee employees.
Motivation of employees
Employers tend to utilize default remuneration styles despite the histGalaxyl failure
of the tried and true solutions that have been used to address conditions in the new
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organization (Tropman, 2001:18). It is worth noting that organizations depend on

the commitment and motivation of their employees. Overloading them, stressing
them, micro-managing them, or letting work spill over into their private lives does
not develop the engagement and loyalty organizations need to succeed (Cooper,
2008:18).
According to Tropman (2001:18), repeated attempts are sustained in part by false
theories about the employees, which form an integral element in the resistance to
change.
These false theories are explained by Tropman (2001:18) as follows:
Misunderstanding of the motivational component of performance

Misunderstanding of the importance of Theory Y
Misunderstanding of job structures and the order of satisfaction with work and the
completion of good work
Misunderstanding of job satisfiers and job dissatisfies
Misunderstanding of the motivational structure of the employee
Misunderstanding of the cultural conflict between achievement and equality in the
workplace
For the purpose of this paper, the importance of these theories can be explained as
follows:
Components of performance: The employers obligation towards the

organization is not only limited to recruiting the suitable employee, but
also to develop existing employees. Employers regularly underestimate
their own responsibility towards employees and their performance.
Employees with lesser ability can be motivated in order to achieve their
performance targets whereas those employees with greater ability do not
have to be motivated as much to achieve or exceed the same
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performance targets. Employers often overestimate the importance of

training, which, in turn can contribute immensely to the aptitude of
employees. It is also an integral role of the employer to create an
organization where employees want to come to work and understand the
importance of their work towards the performance of the organization
(Tropman, 2001:18).
According to Tropman (2001:19), management styles can be divided into

either Theory X or Theory Y styles. The Theory X managers believe that
employees are lazy and do not want to work and that it is the obligation of
the employer to either reward or punish such employees to ensure that
they show up and shape up. Theory Y managers believe the opposite in
that employees want to work and that they will get ultimate job
satisfaction from doing a good job. The purpose of the employer is not to
control the employee, but to provide him with the necessary resources to
perform his duties. According to Tropman (2001:19), one of the biggest
problems is that organizations have Theory X mindsets in a Theory Y
environment. Old compensation systems are still, in many ways, driven by
Theory X thinking.
Structure of the job: Employers tend to believe that satisfied employees

produce good work, hence they try to create an improved morale with the
expectation that it will lead to improved quality. The employer should
instead improve the structure of the job, which will lead to satisfied
employees, which in turn lead to higher quality and improved productivity.
Elements that contribute to employee satisfaction are meaningful work,
successful completion of a task, variety by using different skills, ability to
work on his own and responsibility (Tropman, 2001:20).
Satisfiers and dissatisfiers: One of the common mistakes made by

employers is that they believe that satisfiers and dissatisfiers are the
same thing. When an element is present, it can act as a satisfier, but if
the same element is missing, it does not necessarily mean that it is a
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dissatisfier and vice versa. Table 1 provides a list of elements that

employees like and dislike, as proposed by (Tropman, 2001:21).
TOP SATISFIERS
TOP DISSATISFIERS
Achievement
Company policy and management
Recognition
Supervision
Work itself
Relationship with supervisor
Responsibility
Work conditions
Attachment
Relationship with peers
Growth
Relationship with sub-ordinates
Table 1 - Top Satisfiers and Dissatisfiers according to Tropman (2001)
It can be noted that the list of top dissatisfiers is largely based on relationships
within the organization.
Motivational structures: Harvard economist Thomas Schelling came up with a twoself model. This implied that every employee embodied two different preference
schedules: money now (cash in hand) and money later (cash put aside for
retirement). The employer needs to pay both of these selves, in the form of a
monthly salary for the here-and-now and the retirement contribution of the thenand-there self. This implies that the employer needs to cater for two
compensation targets: the employees present and future selves. The needs of
the two selves must be balanced in the compensation system.
Workplace culture in conflict: A manifestation of this conflict is the continuous

battle between the view of the individual employee and the view of the team
player. The question can thus be asked whether to compensate the employee or
the team? Tropman (2001:22) asks: Should firms pay top dollars to optimize
employee recruitment and retention, or should they pay the going market rate?
Do they give rewards to those who deserve it or those who need it? Do they
promote based on merit or on seniority? The organization could have an
achievement culture based on elements such as market base, here and now,
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solo workers and fair play. On the other hand, the organization could have an
equality culture made up of elements such as team base, then and there, team
workers and fair share. In reality, all organizational cultures are a blend of
achievement and equality cultures (Tropman, 2001: 23).
The hierarchy of needs: The needs of an employee can be explained by Maslows

hierarchy of needs as illustrated in Figure 1 of this chapter. There are two key
elements of Maslows work that affect the remuneration structure. The first
element is that the needs are a hierarchy - it is difficult to address higher level
needs when lower level needs are not fulfilled. The second element is that the
hierarchy provides employers with a checklist which can be used to review the
total compensation package.
In essence, these seven misunderstandings of Tropman (2001:18), tend to mean

that employers have a rigid, over administered, and undermanaged compensation
system. In the modern organization, these perceptions need to be amended,
especially given the structure, needs and expectations to the modern-day
employee.
Breaking with the idea that engagement is merely the opposite of burnout,
Schaufeli et al. (2002:74), defined engagement as a persistent and positive
affective motivational state of fulfillment in employees, characterized by vigor,
dedication and absorption.
Benefit Satisfaction
Basic benefit satisfaction can be defined as an employees attitude towards
organizational benefits focusing on employee safety and security-related needs
(Blau et al., 2001:671). Benefits included under basic benefit satisfaction can be
classified as:
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Vacation
Sick Leave
Retirement
Life Insurance
Disability
Health x Maternity/Family leave

Career enrichment satisfaction was defined by Blau et al. (2001:671) as an
employees attitude towards organizational benefits focusing on employee
employability and skill development needs. The benefits included under career
enrichment satisfaction can be classified as:
Release time for continuing education or professional meetings

Educational assistance or reimbursement for tuition
Special work schedules
Rewards for advanced degrees or certification
According to Williams (1995:1098,) benefit satisfaction is important for two reasons:
The costs of employee benefits are high to companies and because costs
increases and generally exceed inflation, therefore companies have
implemented changes in benefits programmes to control costs.
Benefit satisfaction is of theoretical importance because of its potential links

with other important constructs.
Benefit satisfaction may be related to various behavioral attitudes such as

organizational commitment. According to Williams (1995:1098), employee attitudes
towards benefits have been found to be significant determinants of pay satisfaction and
have been linked to behavioral outcomes such as absenteeism and turnover. Therefore,
an understanding of benefit satisfaction may lead to an increased understanding of
other important employee attitudes and behaviours.
In a study conducted by Lust (1990:92) the findings about benefit satisfaction were no surprise:
employees who are more satisfied with their pay are also more satisfied with their benefits. It
21
goes hand in hand and make up the total compensation package.

ENGAGEMENT
The origin of the term employee engagement lies in research into the extent to
which people employ, or leave out, their personal selves when performing their
work roles. When people are engaged, they tend to express themselves physically,
cognitively and emotionally during role performances (Kahn,1990:692).
Engagement is a controversial subject and there are various definitions for this
term. According to Schneider et al. (2009:23), some of the definitions are:
The individuals involvement and satisfaction as well as enthusiasm for work
A result that is achieved by stimulating employees enthusiasm for their work

and directing it towards organizational success
The extent to which people value, enjoy and believe in what they do
The capability and willingness to help the company succeed, i.e.,

discretionary performance
A heightened emotional and intellectual connection that employees have for

their job, organization, manager or co-workers that in turn influences them to
apply additional discretionary effort to their work
Employee engagement is the key to human capital management because it focuses

on managing employees to produce for the organization rather than focusing on
what the organization does for the employees. Employee engagement is different
from employee satisfaction with the latter connoting satiation and the former
connoting energy (Schneider et al., 2009:27). An engaged employee is aware of
business context, and works with colleagues to improve performance within the job
for the benefit of the organization. The organization must work to develop and
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nurture engagement, which requires a two-way relationship between employer and

employee. Therefore, employee engagement will be the barometer that determines
the association of a person with the organization (Vazirani, 2007:3).
Reward is a hygiene factor and getting it wrong results in disengagement, but
getting it right does not create engagement (Robinson, 2008:57). It is commonly
perceived that engagement affects the bottom line of an organization: engaged
employees identify with their organization, co-operate with their co-workers and
work productively in a team. They also fully understand the business context of the
organization.
According to Vazirani (2007:6), the advantages of engaged employees are:
Engaged employees stay with the company

They normally perform better and are more motivated
There is a significant link between employee engagement and profitability
They form an emotional connection with the company
It builds passion, commitment and alignment with the organizations strategies
and goals
Increases employees trust in the organization
Creates a sense of loyalty in a competitive environment
Provides a high-energy working environment
Boosts business growth
Makes the employees effective brand ambassadors for the company
Research has shown that higher employee engagement is associated with gains in
employee retention and performance, customer service and satisfaction, and business
performance (Wiley, 2009:58).
Engagement challenges
According to Robinson (2008:57), the potential challenges facing the theory
23
behind engagement include:
Engagement typically goes down as length of service goes up
Experienced people are an asset, so how can organizations engage

people who have been with them for a while and may have had
disappointments, such as not being promoted?
Professionals usually owe their engagement to their profession, not

their organization
According to Truss (2009:47), high levels of engagement create a statistically

significant improvement to personal well-being, loyalty, job satisfaction and
performance as well as a reduction in likelihood of leaving.
Truss (2009:47) also states that it is of utmost importance to focus on the
employee job fit, management style, involvement and communication in
order to increase levels of engagement. It should be noted that engagement
strategies should vary depending on the context.
According to Wiley (2009:58), research has shown that higher employee
engagement
is
associated
with
gains
in
employee
retention
and
performance, customer service and satisfaction and business performance.

Pollitt (2005:25) found that environments that foster inclusion (of which
equity is a large part) were found to:
Promote innovation
Create a safer work environment
Drive employee engagement, commitment, and pride
Positively impact customer satisfaction
Benefit financial performance
Engagement measurement
According to Schneider et al. (2009:23), the most common measure of employee
24
engagement used by companies contains four traditional survey items, namely:
How satisfied are you with working for this organization?

Do you plan on working for this organization a year from now?
How proud are you that you work for this organization?
Would you recommend to a friend that he or she come work for this
organization?
These questions are normally asked in order to form an index of engagement. These
questions are more inclined to measure the satisfaction that a person experience when
he or she works for an organization.
According to Schneider et al. (2009:23), these questions measure the following three
aspects:
The level of satisfaction with the job security
The level of satisfaction with fringe benefits
The opportunities
No one can argue that the level of satisfaction is not important, but it does not indicate
the level of engagement of the employees. It is important to measure and manage the
level of engagement, as it is the engagement of the employees that costs the
organization money. When the employee is not fully engaged, the organization still
needs to pay his full salary, even though he has not earned it.
In organizations with only average levels of employee engagement, between 30% and
50% of their payroll is going down the drain (Ayers, 2007:16). The level of engagement
is important for the organization because it needs to maximize the output it gets from
employees, thus maximizing their engagement.
Measures of engagement need to be different from measures of satisfaction found in the typical
employee opinion survey. Employee feelings of engagement and behavioral engagement relate
significantly to market and financial performance, and a measure of engagement targeted on
customer service is significantly related to customer satisfaction (Schneider et al., 2009:27). The
latter suggests that focused engagement measures may be quite useful as a tactic for assessing
25
engagement in relation to important organizational outcomes such as customer satisfaction, but

also perhaps for other outcomes such as innovation and safety (Schneider et al., 2009:27).
Engagement drivers
Schneider et al. (2009:23) defined engagement as having two major components:
Feelings for engagement - this implies the heightened state of energy and
enthusiasm associated with work and the organization.
Engagement behaviours - this implies the demonstration in the service of

accomplishing organizational goals.
It is obvious that employee engagement feelings and behaviours are different from
job satisfaction - they address different kinds of issues and have different drivers.
According to Schneider et al. (2009:23), the three strongest drivers for feeling of
engagement are:
Feeling that there is full utilization of ones skill and abilities Seeing that there is a link
between ones work and the objectives of the organization Being encouraged to
innovate According to Schneider et al. (2009:23), the three strongest drivers for
engagement behaviours are:
Quality of relationships with co-workers
Feeling trusted and respected
Supervisor credibility
In a research study done by Wiley (2009:58), the top ten drivers of employee
26
engagement are:
Confidence in the organizations future
A promising future for the employee x Support for work-life balance x Safety is a
priority
Excitement about work
Confidence in the organizations senior leaders
Satisfaction with recognition
Corporate responsibility efforts that increase overall satisfaction
Satisfaction with on-the-job training
A manager who treats employees with respect and dignity
From the list of drivers mentioned above, it could be concluded that offering praise for a
job well done is a simple and inexpensive way to encourage employee engagement.
According to Blizzard (2003;1), the various job categories also differ with regards to the
drivers of workers satisfaction and engagement - or the lack thereof. Each category
faces challenges specific to the type of work involved. Blizzard (2003:2) illustrated the
employee engagement hierarchy as follows:
Figure 4 - Employee Engagement Hierarchy
27
According to McBain (20066:21), the employee engagement concept has emerged

as perhaps the most useful idea for HRR practitioners in the 21
st
century. Indeed,
such engagement is tithe ultimate prize for employers, according to one

consultancy which has done much research into the area (Towers Perrrin, 2003:33).
Its emergence stems, at least in part, from the way the concept seems to integrate
so many different aspects of HR, such as employee satisfaction, commitment,
motivation, job design, and involvement (Stairs, 20055).
Given the clear relationship found between employee satisfaction with diversity
and employee engagement, the future focus should hinge on increasing employees
perceptions of diversity efforts, thus leading to increased levels of employee
engagement and reduced turnover, (Sheridan, 2010:1)). Chief Executive Officers
and General Managers who have discounted the importance and value of diversity
efforts can no longer afford to do so.
Increasing evidence suggests employee engagement can make a difference to the
performance of employees and teams within organizations. The employee
engagement theory reflects change in the organizational environment, and the
mutual expectations of employees and employers in the physiological contract
mirror changing patterns of motivation: many individuals are seeking greater
personal fulfillment in their working lives and are not solely motivated by financial
rewards. In addition, changes in the business landscape will require more flexibility,
collaboration, project-based activities and talent-led teams (McBain, 2006:21).
Sufficient evidence exists to indicate that employee engagement has significant
potential to assist managers in improving team and organizational performance by
improving the daily experience of employees within the organization. There are
however, more issues remaining, like the precise definition of employee
engagement and the distinguishing between engagement, satisfaction and
commitment. The truth is, there is no quick fix, no more than there is a quick fix for
cancer. But if diagnosed early, both can be cured (Ayers, 2007:16).
The conclusion is that employee engagement is the key to successful use of an
28
organizations human capital. However, employee satisfaction has not become an

irrelevant measure. If it is used appropriately within the larger framework of
engagement, employee satisfaction measures can provide useful insight for the
organization (Blizzard, 2003:2).
STRUCTURING OF REMUNERATION PACKAGES
Why does the remuneration package have to be structured with the aid of fringe
benefits? Considering the growing complexity of remuneration packages, and the
cost of structuring, administering and financing them, this question is even more
important.
If
all
of
these
fringe
benefits
were
eliminated,
compensation
management would become much easier and simpler, but not necessarily cheaper,
although administration costs would decrease (McCaffery & Harvey, 1997:1).
Compensation is an important factor in the design, implementation and
maintenance of organizations. However, compensation includes not only wages paid
to employees but also non-wage benefits such as medical insurance and a
retirement plan (Weathington & Jones: 2006:292). Wages and benefits together are
often the biggest expense incurred by organizations.
The Old Pay System

Tropman (2001:7) argued: Compensation is the elephant in the living room of
most organizations - large, oppressive, and un-addressed. Attention to pay systems
is often non-attention. It falls into what Harvards Chris Argyris called defensive
routines - they are not discussible, and their non-discussibility is not discussible!
This era of thinking included Tropmans (2001:7) comment that: Letting individuals
construct some of their own pay packages? Cant do it! Could never do it! Must
have been designed by a professor! These comments are still relevant when
dealing with an employer who still believes in the one size fits all philosophy
where every employee must be satisfied with the remuneration package that is
chosen for him by management. This phenomenon is called the old pay system.
Components of the Old Pay System
29
According to Tropman (2001:8), the typical old pay system consists of five parts:
Base pay
Annual merit raise
Benefits
A few perks
Occasional gratuities
These five elements together form the compensation package, which could be
described as a return received in exchange for the employees performance and ideas
in the organization. This exchange relationship is summarized in the terms and
conditions of the employment contract, which along with the unstated exchange
agreement forms the implicit contract.
According to Milkovich and Newman (2005:12), the implicit contract can be explained
as: an implicit contract is an unwritten understanding between employers and
employees over their reciprocal obligations and returns; employees contribute towards
achieving the goals of the employer in exchange for returns given by the employer and
valued by the employee.
Problems arising from the Old Pay System
Employers often realize that old pay systems create certain problems in the
organization. These problems might include employees feeling that they are
entitled to their pay every month. This situation can be compared to that of
runners with a stone in their shoe; it irritates them to the edge, but they
cant seem to find time to stop and change the situation. According to
Tropman (2001:9), there are inherent problems in the way the old pay
system is conceptualized:
Pay becomes entitlement driven: In old pay, employees feel they are
entitled to their pay, and to raises in pay, unconnected with any
accomplishments they produce.
30
Increases cap out: With old pay, increases are cut off when the
employee reaches the top of a jobs range. Employers thus bump
workers to higher job classifications solely to give them more pay.
Failure to motivate: Old pay does not motivate because it is mostly

unlinked to the employees production and contribution. To begin with,
base pay (before merit adjustment) is frequently unconnected to any
results or accomplishments. It is almost as if one is paid a salary just to
show up.
Annuitized: With old pay, each raise goes into the base. Hence
employees pay year in and year out for last years accomplishments.
This means that employee investments keep costing more without any
parallel increase in productivity.
Cost of living increase: This increase comes every year.
Increase attached to base: That is, raises are added to the employees
base pay.
Increase largely based on seniority: Raises are greater for those who
have been with the organization for longer, sometimes because length
of service is directly figured in and sometimes because, using a
percentage increase model, those who have been there longer make
more money and hence receive a bigger base increase.
Grade-based promotion: Promotion to higher salary grades (based on

seniority) carries employees to higher pay potential, both in salary and
bonus. (Bonuses are typically calibrated as a percent of salary so in
this model the more you make, the more you are paid).
Trophies: At various anniversary dates of employment (five years, ten

years, and so on) employees are given mementos of their association
with the company. Trophies are, of course, more meaningful if they are
31
given for some actual accomplishment rather than just for hanging
around.
Holiday gifts: At holiday time, especially Christmas, the company gives

employees a gift.
Bonuses: Periodically, but often unconnected or connected only hazily to

anything the employee can figure out, a bonus is provided.
The Total Compensation Package

Components of the Total Compensation Package
Tropman (2001:4) asked: But is pay all there is? The answer is no, because pay is
often badly configured and other things besides pay are needed to attract, retain,
and motivate employees.
The total compensation packages consist of various forms of compensation that the
employee receives, and sometimes even expects to receive from the employer. This
total compensation package can be categorized into total remuneration and
relational compensation. The relational compensation consists of work factors that
have a psychological impact on the employee. These factors are often categorized
as motivating factors according to Herzbergs (1975) motivational hygiene theory.
When these motivating factors are present, the employee will experience job
satisfaction. When the motivating factors are absent, the employee will experience
dissatisfaction.
The total remuneration consists of hygiene factors that will contribute to the
motivation of the employee. When these factors are absent, the employee will not
necessarily feel dissatisfied, but not fully satisfied. These factors can be categorized
into the cash component and the fringe benefits. The cash component typically
32
consists of components like the basic salary along with the merit increases that the
employee receives. The fringe benefits can be a combination of various components
like the car allowance, housing allowance, medical aid insurance, pension fund
contributions, etc. The layout for the Total Compensation is illustrated in Figure 5
below:
Figure 5 - Total Compensation illustration
The total compensation package consists of many elements which act as important
rewards for the employee. These elements overlap, relate to and sometimes
integrate with the total compensation package, but are often less tangible.
According to Tropman (2001:37), the five key elements of the work experience are:
33
Acknowledgement, appreciation and recognition
Balance of work/life
Culture
Development
Environment
Tropman (2001:37) also argues that it is the collective impact of the components that
matters as much as the individual elements.
According to Tropman (2001:14), there are several differences between the Old Pay
system and the Total Compensation system. Some of the differences are explained by
him as follows:
Employees have to earn the right to competitive pay: No more

entitlement. No one necessarily is guaranteed anything. Personal pay
is driven primarily by performance, which takes into account not only
individual contributions but also group and company performance.
Self-funded at the unit level: The profit is shared by profit centers within
the organization. Employees may have several sources of pay, and
what they get depends on the performance of the various units.
Variable pay: At the individual level, pay (or salary) becomes somewhat
variable. Employees are not entitled to their entire pay unless they
meet certain benchmarks; however, if they exceed the benchmark,
they can make more than their agreed-upon base.
Line of sight: Most organizations have tried to adopt approaches with a

stronger line of sight between the pay individuals receive and the
performance results they most directly influence. As a result, many
variable-pay arrangements are tied to business-unit results.
Unit gain-sharing: The bonus pool is figured on the gain the unit makes
above market average, minus costs and scrap.
Firm gain-sharing: This portion of the bonus comes from the overall firm
performance, again, looking at the amount above market.
34
Market adjustment to base: Base pay is adjusted, overall and for

individuals, depending on the market forces, not seemingly random
acts of the human resources department.
These differences are critical in the total compensation system. According to

Tropman (2001:15), these differences are indeed the basis of, and the drivers
for, the total compensation solution.
The Philosophy of Total Compensation
The organization needs a clear, logical and consistently expressed compensation
philosophy. There are three common problems that are frequently associated with
the philosophy of an organization. Firstly, no philosophy is often present, secondly,
the wrong philosophy is applied to the compensation structure and thirdly, there are
significant gaps between the desired philosophy and the implementation of the
philosophy to the compensation structure. The ideal compensation philosophy
involves five key components as described by Tropman (2001:38):
A clear understanding of what we pay employees for

An understanding of what accomplishments we want from employees
An understanding that employee compensation consists of both investments and

awards As self-explanatory as these points may seem to be, most organizations
frequently stumble over them. It is worthwhile to consider the merit of each of
these points.
An understanding of the need to articulate the compensation philosophy in a
compensation policy
A compensation distribution matrix
Key steps to formulate a Total Compensation Strategy

According to Milkovich and Newman (2005:36), the development of a total
compensation strategy involves four simple steps. These steps might seem
simple and easy, but their execution is complex. The implementation process
involves trial and error, experience and insight.
Step 1: Assess total compensation implications
35
This involves the consideration of the organizations past, present and future.
All factors that might influence the business environment of the organization
must be considered as well as their contribution to the organizations
success. Some of these factors are:
Competitive dynamics: The key is to have a clear understanding of the
industry in which the organization has to compete. Factors such as changing
customer needs, changing labour markets, regulations and competitive
action are important to determine the business environment in which the
organization needs to function.
Culture/Values: The compensation strategy reflects the values that the
employer will use as a guideline to manage its employees. The compensation
strategy must mirror the companys image and reputation. Factors of
importance include personal satisfaction in work accomplished, security,
growth opportunities and rewards for companys success.
Social and Political Context: Managers frequently expect that a diverse
workforce and a diverse form of pay may contribute to the value of the
organization and would be difficult for competitors to imitate. The social
context includes a wide range of factors such as legal and regulatory
requirements,
cultural
differences,
changing
workforce
dynamics
and
employee expectations.
Employee Needs: The implementation of a compensation strategy often
ignores the differences between employees. The individual needs of an
employee are often overlooked when formalizing a compensation package,
which is limited by the contemporary pay system.
The importance of Pay in Overall HR strategy: The compensation strategy is
often influenced by other HR systems in the organization. An example is that
when the organization is decentralized an emphasis is placed on flexibility,
and then the organization cannot make use of a confidential pay system
controlled by a few employees at a central business unit.
36
Step 2: Map a total Compensation Strategy

The total compensation strategy consists of the following five factors:
Objectives: What is the importance of the total compensation system in the
overall HR strategy? Is the total compensation system a catalyst, playing a
major role in the HR strategy? Or is it used with less importance, playing a
subordinate role in the HR strategy?
Alignment: How well does the total compensation package support career
growth in the organization? This will depend on the level of the hierarchy in
the organization and the flexibility of the HR strategy in the organization.
Competitiveness: How does the total compensation package compare relative
to what a similar organization would offer in the market? This is also
influenced by the value the employee would place on fringe benefits
compared to basic salary. A secondary factor to consider is the balance of
work and life for the employee.
Contribution:
The
preference
of
the
organization
between
employee
contribution and group contribution.

Management: The impact that an employee can have in terms of ownership,
transparency, technology and customization of organization structures.
Step 3: Implement the Strategy
This step involves the formulation of a process that would enhance the
implementation of the total compensation strategy in practice.
Design system to translate strategy into action: The basic principle of
implementing a strategy is to align the total compensation structure to the
business strategy.
Choose techniques to fit strategy: A supporting compensation system places
37
less emphasis on evaluating skills and jobs and more emphasis on incentives
designed to encourage innovations supporting the overall business strategy.
Step 4: Re-asses the Strategy

This step involves continuous assessment of the compensation strategy to fit
changing conditions.
Realign as conditions change: Changing market conditions emphasize the
need for a flexible compensation strategy.
Realign as strategy changes: A change in business strategy would imply the
management of the different links between the compensation strategy and
peoples perceptions of market related pay strategies.
Factors Influencing Benefit Choice
Milkovich and Newman (2005:409) provide the following list of factors which they
believe will influence the benefits chosen both by employees and employers
depending on their different preferences.
These factors are outlined in Table 2 below.
38
Table 2 indicates that there are a number of factors influencing employer

preferences when it comes to the selection of fringe benefits for the employee. It is
of utmost importance for the employer to consider the costs of employee benefits
as part of the total compensation costs for the organization. Frequently employees
are under the impression that when a certain fringe benefit is fashionable, it should
be included into their compensation package, despite the taxable implication of this
inclusion.
Table 2 also indicates that the factors influencing employee preferences are mainly
based on two groups of factors. On the one hand are the needs of the particular
employee, and on the other hand is the perception of that employee about the
fairness of his total compensation package. The fringe benefits perceived to best
satisfy an unfulfilled need are the most desired benefits at that moment. The
second important aspect to consider is the factor of equity or inequity.
No matter how confidential their total compensation packages are, they always
surface in conversations between employees. They in turn then discuss and
compare their compensation packages and form their own opinion about equity or
inequity based on their perceptions. These perceptions can be either a motivating
factor for the employee that feels he is sufficiently compensated for his contribution
or a de-motivating factor when the employee feels he is not sufficiently
compensated.
CULTURES
A cultural system can be defined as people sharing similar beliefs, customs, norms
and mental programming (Brislin et al., 2005:88). Most definitions about culture
39
emphasize human-made elements that are shared through communication, which

increase the probability of survival resulting in greater satisfaction for those in the
community.
In this section, the focus will be mainly on the impact of cultural diversity on the job
satisfaction created by remuneration structures. The importance of certain fringe
benefits to the employee may be determined by the economic situation in the
country and availability of certain luxury items.
RESEARCH METHODOLOGY
INTRODUCTION
The main objective of this comparative study is to assess whether there is a definite
correlation between the type of fringe benefits that are included in the
remuneration package of an employee and the level of job satisfaction that the
employee experiences at the workplace, as well as the level of engagement the
employee displays towards his position and the organization.
RESEARCH DESIGN
One of the most popular and effective measurement tools to determine the impact
that fringe benefits have on job satisfaction and engagement is a research survey.
Therefore, a questionnaire was designed specifically for Galaxy employees to obtain
information regarding their perceptions on job satisfaction, engagement,
remuneration and benefits. A questionnaire was developed consisting of four
sections. Section A consisted of fifteen questions regarding job satisfaction. Section
B consisted of fifteen questions regarding engagement. Section C comprised of
fifteen questions about fringe benefits and remuneration. Section D consisted of
seven questions regarding the participants biographical information. The
participants, all Galaxy employees, were informed that the purpose of the
questionnaire was to gather responses on how they perceived the impact that
remuneration packages and fringe benefits have on job satisfaction and
engagement.
40
Survey Distribution
The survey distribution is limited to the employees of Galaxy in India. All the
employees completed questionnaires, thus representing the full population. The
population distribution is as follows:
All the employees working in the regional office in Mumbai, India

All the employees working in the factory in Delhi, India
Population description
For this study, all employees across all levels in the organization were requested to
complete a questionnaire. In India, the population was divided into two groups:
The employees in the regional office in Mumbai
The employees in the factory in Delhi
The population of the employees in the regional office in Mumbai consists mainly of
middle management and senior management employees. This group of employees
are sub-divided into two groups. The first sub-group is the majority and consists of
Indian, who support the sales and after-sales service of the products in India. The
second sub-group consists of foreign employees who represent several countries
from all over the world. These employees are involved in the administrative support
of the Asian business for the organization. The regional office in Mumbai consists of
highly educated employees who are specialists in their field of expertise and who
are brought to this office for specific functions.
The population of the employees in the factory in Delhi mainly consists of local
employees from that area who are employed in junior positions in the organization.
41
The employees build components for the construction of electronic detonators and
control equipment, and have limited education. Except for the three people in
management positions, these employees do not have any formal tertiary
qualifications. The population could also be characterized by some permanent
employees and some contract employees who are employed on a six month
contract period.
Research instruments
The following research instruments were used.
Questionnaires
Structured interviews to assist non English speakers in completing a
questionnaire. A local employee from Galaxy India, capable of translating
English into the native languages, assisted with the interviews.
No unstructured interviews were required for employees working in India as all

employees completed the questionnaires. A questionnaire was given to every employee
in the Mumbai office for completion. The questionnaire was e-mailed to the factory in
Delhi, where it was printed by the secretary and handed to all employees for
completion. The completed questionnaires were scanned and e-mailed back to the
author.
A questionnaire was e-mailed to the regional office in Accra to be printed and distributed to all
the employees in India. The author visited offices to assist all the employees with the completion
of the questionnaires, and to ensure that all employees completed a questionnaire.
QUESTIONNAIRE
Determining the impact that fringe benefits have on job satisfaction and
engagement needs to be more than just speculation. A common measurement tool
to determine the impact that fringe benefits has on job satisfaction and
engagement is a research survey. To find an existing questionnaire that comprises
of questions consisting of all three criteria, job satisfaction, engagement and fringe
benefits, was virtually impossible. Therefore, a questionnaire was designed
42
specifically for Galaxy employees to obtain information regarding their perception

and opinions on these subjects.
The questionnaire consisted of four individual sections:
Section A Job Satisfaction

Section B Engagement
Section C Fringe Benefits and Remuneration
Section D Personal and Demographical Information
Questions were chosen and constructed with particular purpose for this paper. Several
questionnaires were studied for background information that assisted with the
structuring of the questions.
All questions in Section A, B & C were measured on a Likert scale, where 1 indicated
strongly agree, 2 indicated agree, 3 indicated disagree and 4 indicated strongly
disagree.
A copy of the questionnaire is provided in the Appendix A.
STATISTICAL ANALYSIS
A total of 57 questionnaires were distributed to three different demographical areas.
Galaxy management participated in this study and made it compulsory for every
employee to participate and complete a questionnaire. All the questionnaires were
submitted to the Statistical Consulting Services of the North-West University
Potchefstroom Campus for analysis. The Statistica Version 9.1 (Statsoft, 2005), SPSS
(SPSS Inc. 2009) and SAS (SAS Institute Inc., 2005) programmes were used.
The statistical analysis was divided into six sections:
x Frequency distribution and descriptive statistics of the individual items x
Cronbachs Coefficient Alpha for each section x Descriptive statistics for the
43
selected sections x Test for correlation between sections x Test for differences
between demographical areas
Tests for differences in gender, age, experience, academic qualifications and
level in the organization
Frequency Distribution and Descriptive Statistics of the Individual Items
A total of 57 questionnaires were distributed too three different demographical
areas, Mumbai and Delhi.. All the questionnaires were completed and the
representation for the three areas is shown in Figure 6 below:
Figure 6 - Geographic Distribution
The population was divided according to gender, and thee representation is

indicated in Figure 7 below. The majority of the population was male, being
represented by 82% against thee 16% representation of the female participants..
There was one participant who did not indicate his/her gender on the questionnaire..
44
Figure 7 - Gender Distribution
According to thee analysis of Section D of the questionnaire, the representation for

each oaf the sub--sections is indicated in the tables below. Each table displays the
percentage of participants who indicated the relevant criterion, as well as the
number of participants who did not answer thee question.
Age Distribution
20--25
10.5%
46--50
5.3%
26-30
31-35
15..8%
36-440
22.8%
51-55
7.00%
28.1%
56-60
61-665
0.0%
0.0%
41-45
8.8%
Number Missing
1
Table 4 Age Distribution
Academic Qualification
Did no M ot complete Comple Matri eted
Matric
c
28.1%
10.5%
Post Matric
Qualification c n
57.99%
Number Missing
Table 5 Academic Qualification Distribution Table 6 Years of Service Distribution
Years of Service
Less than 1
Year
22.8%
45
1-5 Years
66.7%
6-10 Years
8.8%
11-20 Years
1.8%
Number Missing
Job Level in the Organization

Executive
5.3%
Senior
Management
Middle
Management
5.3%
21.1%
Junior
64.9%
Number Missing
Table 7 Job Level in the Organization Distribution
Sections A, B and C of the questionnaires are summarized in Table 8 below. For each
of the questions, the percentages of the participants who indicated each of the
criteria have been indicated, as well as the mean and standard deviation for each
question.
Frequency Distribution
% Answered
Section
Strongly
Question Agree
Strongly
Agree Disagree Disagree
Number
Missing
Standard
Mean Deviation
36.8
54.4
3.5
1.8
1.691 0.635
29.8
61.4
1.8
1.8
1.741 0.589
21.1
64.9
14.0
0.0
1.930 0.593
31.6
61.4
3.5
0.0
1.709 0.533
26.3
57.9
10.5
1.8
1.873 0.668
10.5
33.3
47.4
3.5
2.463 0.745
26.3
50.9
19.6
1.8
1.964 0.738
19.3
38.6
35.7
5.4
2.268 0.842
22.8
59.6
15.8
0.0
1.929 0.628
10
24.6
66.7
7.0
0.0
1.821 0.543
11
22.8
42.1
26.3
5.3
2.145 0.848
12
7.0
29.8
42.1
13
28.1
66.7
3.5
0.0
1.750 0.513
14
33.3
63.2
3.5
0.0
1.702 0.533
15
21.1
61.4
14.0
1.8
1.964 0.660
47.4
45.6
3.5
0.0
1.545 0.571
31.6
38.6
19.3
8.8
2.054 0.942
15.8
2.704 0.838
Frequency Distribution
% Answered
46
Section
Strongly
Question Agree
Strongly
Agree Disagree Disagree
Number
Missing
Standard
Mean Deviation
21.1
49.1
24.6
5.3
2.140 0.811
22.8
54.4
14.0
7.0
2.054 0.818
26.3
59.6
10.5
0.0
1.836 0.601
33.3
56.1
5.3
1.8
1.745 0.645
17.5
49.1
21.1
8.8
2.218 0.854
15.8
38.6
22.8
24.6
64.9
8.8
0.0
1.839 0.565
10
7.0
57.9
26.3
3.5
2.278 0.656
11
31.6
49.1
10.5
7.0
1.929 0.850
12
17.5
56.1
22.8
0.0
2.055 0.650
13
22.8
66.7
7.0
0.0
1.836 0.536
14
10.5
38.6
42.1
3.5
2.407 0.740
15
28.1
67.9
3.6
0.0
1.750 0.513
50.9
29.8
10.5
1.8
1.604 0.768
47.4
28.1
15.8
8.8
1.860 0.990
56.1
29.8
7.0
1.8
1.519 0.720
21.1
10.5
44.6
22.8
2.696 1.060
3.5
28.1
31.6
24.6
21.1
26.3
26.3
2.554 1.143
14.0
35.1
36.8
10.5
2.455 0.878
17.5
33.3
35.1
14.0
2.456 0.946
38.6
36.8
17.5
3.5
1.855 0.848
10
5.3
31.6
35.1
11
43.9
28.1
19.3
5.3
1.855 0.931
12
29.8
35.1
24.6
7.0
2.091 0.928
13
40.4
26.3
28.1
5.3
1.982 0.954
14
3.5
28.1
42.1
15
38.6
45.6
10.5
17.5
33.3
26.3
21.1
3.5
3
1
2.444 0.984
2.982 0.892
2.839 0.890
2.852 0.810
1.786 0.780
Table 8 Frequency Distribution
Cronbachs Coefficient Alpha for each of the Sections

This test was performed to test for consistency in responses in the individual
sections. A Cronbachs coefficient alpha value of greater than 0.7 indicates an
internal consistency of the answering pattern of the participants in the section,
47
which indicates reliability of the section (subscale) (Nunnally, 1978: 295).

Interrelated items may be summed to obtain an overall score for each participant.
Cronbach's coefficient alpha estimates the reliability of this type of scale by
determining the internal consistency of the test or the average correlation of items
within the test (Nunnally, 1978: 295).
Some of the questions were reversed-phrased to test if the participant actually did
read and understand the implications of the question. The scores of these questions
needed to be reversed for the calculation of Cronbachs alpha coefficient (Field,
2009:675). The reversed phrased questions were:
Section A Questions 6, 8 and 12
Section B Questions 8 and 10
Section C None
For Section A, with all questions included, the Cronbachs coefficient alpha value
was 0.642. After the removal of questions 5, 6 and 8, the Cronbachs coefficient
alpha value increased to 0.792, which indicated an internal consistency within the
answering pattern for the remainder of the questions. It is interesting to note that
questions 6 and 8 were reversed phrased and therefore their scores were also
reversed. The fact that these questions did not show an internal consistency with
the other questions may indicate that respondents did not read the questions well.
For Section B, with all questions included, the Cronbachs coefficient alpha value
was 0.819. This indicated an internal consistency within the answering pattern for
the remainder of the questions; however, questions 8 and 10 (after reversing their
scores) were negatively correlated to the remainder of the questions. These
questions were removed and the Cronbachs coefficient alpha value increased to
0.867. Once again, it is interesting to note that questions 8 and 10 were reversed
phrased and therefore their scores were also reversed. The fact that these questions
did not show an internal consistency with the other questions may indicate that
respondents did not read the questions well.
48
For Section C, with all questions included, the Cronbachs coefficient alpha value
was 0.736. This indicated an internal consistency within the answering pattern for
the remainder of the questions; however, questions 5, 10 and 14 were little or
negatively correlated to the remainder of the questions. These three questions
indicated a high correlation with one another. After the exclusion of these questions,
Cronbachs coefficient alpha value increased to 0.799. Due to the high correlation
amongst the three questions, the decision was made to keep questions 5, 10 and 14
as a separate section with a Cronbachs coefficient alpha value of 0.860. Section C
was thus divided into two sub-sections; Section C fringe benefits and Section C remuneration.
Descriptive statistics for the selected sections
After the Cronbachs coefficient alpha was calculated and the necessary questions
removed to obtain reliable subscales, the descriptive statistics for each section were
statistically calculated as indicated in Table 9 below.
Descriptive Statistics
Section
Number of participants
Mean
Standard Deviation
Section A
57
1.879
0.354
Section B
57
1.948
0.442
57
2.067
0.496
2.897
0.761
Section C
fringe benefits
Section C
remuneration
57
Table 9 Descriptive Statistics
Given the scale used in the questionnaire, ranging from 1 to 4, where 1 indicated
disagree, a mean value of 1.879 indicates a notion of agreement by participants in
Section A. In Section B, a mean value of 1.948 also indicates a notion of agreement
with the questions raised in the questionnaire. Section C indicated a mean value of
2.067, which also indicates that the participants are mostly in agreement with the
questions raised about fringe benefits. The mean value of 2.897 indicates that
participants are mostly in disagreement with the questions raised about
remuneration. The standard deviation gives an indication of the variability of the
responses. The answers of Section C remuneration show the largest variability of all
sections.
Test for Correlation between Sections
Correlations were calculated for:
49
Job Satisfaction and Engagement

Job Satisfaction and Fringe Benefits
Job Satisfaction and Remuneration
Engagement and Fringe Benefits
Engagement and Remuneration
test to determine practically significant correlation was performed. In other words,
exploration of statistically significant correlations (p-values) is not relevant, since no
generalization from a sample to the population is needed. For the purpose of the
correlation test, the Nonparametric Spearmans correlation coefficient (r) was used. This
correlation coefficient does not depend on the assumption of normality and is based on
ranks of the data (Field, 2009:180).
For practically significant correlation, a correlation coefficient of 0.1 indicated a small,
non-practically significant correlation. A correlation coefficient of 0.3 indicated a medium,
practically visible correlation. A correlation coefficient of 0.5 indicated a large, practically
important correlation (Steyn, 2009:4).
The results for Spearmans Nonparametric correlation coefficients are shown in Table
10 below:
Non-parametric Correlations
Section A
Correlation Coefficient
Section B
Section C
fringe benefits
Section
Section
Section C Section C
fringe benefits
remuneration
0.623
0.165
0.249
0.187
0.188
-0.261
Test for differences between demographical areas

A test for differences was done between the three different geographical areas
and
each individual section. This was done to determine whether there were any
differences in the levels of job satisfaction, engagement, fringe benefits and
remuneration for the employees working in Mumbai, Delhi.
The ANOVA test was performed to test for differences. This test consists of the
50
Omnibus test which is an analysis of variance and tests whether all the groups
are
the same, as well as post hoc tests which make pair-wise comparisons between
the
groups. The results for the Omnibus test are shown in Table 11 below. Note that
the
p-values are reported and interpreted in and below this table for completeness.
However, since the study was conducted on the entire population, p-values
(statistical significance) are actually not relevant (Ellis & Steyn, 2003:51). For
the
post hoc tests effect sizes (practical significance) are calculated and reported,
which
can be interpreted for a study of an entire population, where generalization from
a
sample to a population is not necessary.
A p-value of less than 0.05 indicates that the three demographic areas did not
answer the questions in each section in the same manner. In the context of pvalues,
only Section C for both the fringe benefits and the remuneration indicated a
statistically significant difference between the three demographic areas in the
answered questions. Post hoc tests will be applied to compare pair-wise the
demographic areas and determine where the differences lie. Because the
questionnaires represent the complete population, it will indicate the effect sizes
of
the post hoc tests will be given (i.e. p-values of post hoc tests will not be
reported).
The effect size is indicated by Cohens d-value. A d-value of 0.2 indicates a small
non-practically significant difference. A d-value of 0.5 indicates a medium

practically visible difference. A d-value of 0.8 indicates a large practically
important
difference (Ellis & Steyn, 2003:51).
Job Satisfaction
51
P-Values
Delhi
Mumbai
Effect Sizes
Delhi
Mumbai Town Mumbai
with
with
with
0.963
0.566
Section A Mean
with
with
Delhi
Mumbai
0.963
0.461
Delhi
0.566 0.461
1.922
0.085
0.303
1.956
0.426
1.801
Engagement
P-Values
Delhi
Town
Effect Sizes
Mumbai
Delhi
with
with
0.240
0.215
Mumbai Town Mumbai

with
Section B Mean
with
with
Delhi
Mumbai
0.240
0.996
Delhi
0.215 0.996
2.120
0.576
0.511
1.861
0.028
1.875
Fringe Benefits
P-Values
Delhi
Mumbai
Town with
Effect Sizes
Delhi
Mumbai
with
with
Town
Mumbai
fringe benefits
with
Delhi
Section C
with
0.846
Mumbai
0.846
Delhi
0.000 0.000
0.000
0.000
Mean
2.356
0.189
2.422
2.078
2.470
1.628
Remuneration
P-Values
Delhi
Town
Mumbai
with
Effect Sizes
Delhi
Mumbai
with
with
Town
Mumbai
remuneration
with
Delhi
Section
0.264
Mumbai
0.264
Delhi
0.424 0.023
0.424
0.023
with
Mean
2.880
0.572
0.419
2.467
0.989
3.181
Table 12 Effect sizes for Demographic areas
When the effect sizes for the job satisfaction are reviewed, it can be noted that
the
effect size for Delhi with Mumbai is; d = 0.084, which is small, and
indicates a small, non-practically significant difference. This implies that the two
demographical areas have answered the questions in the section about job
52
satisfaction in the same manner. When the same effect size for Delhi with
Mumbai is reviewed, it indicates a d-value of 0.303, which is between the small
and
medium intervals on the scale. The value is closer to the small, non-practically
significant difference. For the purpose of this study, this difference is too small
to be
considered practically significant. The effect size for Mumbai with Delhi
indicates a d-value of 0.426. This d-value is closer to the practically visible
difference
value and can be considered practically visible for the purpose of this paper. The
mean values for the three demographical areas indicate that the employees in
Delhi are experiencing an ever so slightly higher level of job satisfaction than
the
employees in Mumbai and Delhi.
Test for differences in gender, age, experience, academic qualifications

and level in the organization
Gender
A t-test was conducted to test whether males and females responded differently to
the sections. The p-value and d-values (effect sizes) of the t-test are shown in Table
13 below. Once again, p-values are reported and interpreted for the sake of
completeness. However, emphasis in interpretation and conclusions should be
placed on the effect sizes (d-values). The questionnaire was completed by 47 males
and 9 females.
People perform better on their jobs because of pay
Compensation is an important factor in the design, implementation and maintenance of

organizations. However, compensation includes not only wages paid to employees but
also non-wage benefits such as medical insurance and a retirement plan (Weathington
& Jones: 2007:292). Wages and benefits together are often the biggest expense
incurred by organizations.
The aim of this paper is to investigate and determine the correlation between the
remuneration package and the level of job satisfaction and engagement. This was
53
approached by focusing on the following specific objectives:
To determine the importance of fringe benefits amongst employees

To determine the impact of fringe benefits on the level of job satisfaction of the
employee
To determine the impact of fringe benefits on employee engagement
To understand the cultural differences between cities
To gain better knowledge of the structuring of remuneration packages in Mumbai,
Delhi
These specific objectives were investigated by means of a specifically drafted

questionnaire that was distributed amongst all the employees of Galaxy employed in
India. A total of 57 questionnaires were distributed and returned for analysis. Galaxy
management participated in this study and made it compulsory for every employee to
participate and complete a questionnaire. This contributed to the study of a complete
population and not just a sample. The statistical analysis was divided into six sections:
Frequency distribution and descriptive statistics of the individual items

Cronbachs Coefficient Alpha for each section
Descriptive statistics for the selected sections
Test for correlation between sections
Test for differences between demographical areas
Test for differences in gender, age, experience, academic qualifications and level
in the organization
The distribution of the participants was 27 from Mumbai, 30 from Delhi. The
questionnaires were completed by 47 males and 9 females from all three
demographical areas. The Cronbach's coefficient alpha was calculated to determine
whether there was consistency in how the participants answered the questions for each
of the individual sections of the questionnaire. Some of the questions were reversephrased to test if the participants actually read and understood the implications of the
question. The scores of these questions needed to be reversed for the calculation of
Cronbachs alpha coefficient (Field, 2009:675). These questions had to be removed to
obtain a Cronbach's coefficient alpha of greater than 0.7, which was needed to
determine an average mean value for the question in the sections (Nunnally, 1978:
295).
54
Given the scale used in the questionnaire, ranging from 1 to 4, where 1 indicated
disagree, a mean value of 1.879 indicates a notion of agreement by participants in
Section A. In Section B, a mean value of 1.948 also indicates an agreement with the
questions raised in the questionnaire. Section C indicated a mean value of 2.067, which
also indicates that the participants are in agreement with the questions raised about
fringe benefits. The mean value of 2.897 indicates that the participants are in
disagreement with the questions raised about remuneration.
test to determine practical correlation was performed. For the purpose of the correlation
test, the Nonparametric Spearmans correlation coefficient (r) was used. For practical
correlation, a correlation coefficient of 0.1 indicated a small, non-practically significant
correlation. A correlation coefficient of 0.3 indicated a medium, practically visible
correlation. A correlation coefficient of 0.5 indicated a large, practically important
correlation (Steyn, 2009:4).
Job Satisfaction and Engagement: r-value = 0.623, indicating a highly

important correlation. Thus a high level of job satisfaction will imply
a high level of engagement and vice versa.
Job Satisfaction and Fringe Benefits: r-value = 0.165, indicating a low

to medium correlation. Therefore, these two variables show a low
practically visible correlation. This can indicate that the level of job
satisfaction of an employee is not dependent on the fringe benefits
an employee receives from the organization.
Job Satisfaction and Remuneration: r-value = 0.249, indicating a

practically significant correlation. This can indicate that the level of
job satisfaction an employee experiences in the organization is
influenced by his remuneration package.
Engagement and Fringe Benefits: r-value = 0.187, indicating a low to

medium correlation. Therefore, these two variables show a low
engagement of an employee is not dependent on the fringe benefits
55
Engagement and Remuneration: r-value = 0.188, indicating a low to

medium correlation. Therefore, these two variables show a low
engagement of an employee is not dependent on the remuneration
Note that the p-values are reported and interpreted in and below this table
for completeness. Since the study was conducted on the entire population, pvalues (statistical significance) are actually not relevant (Ellis & Steyn,
2003:51). For the post hoc tests effect sizes (practical significance) are
calculated and reported, which can be interpreted for a study of an entire
population where generalization from a sample to a population is not
necessary.
The ANOVA test was performed to test for differences. This test consists of
the Omnibus test which is an analysis of variance and which tests whether all
the groups are the same, as well as post hoc tests which make pair-wise
comparisons between the groups. A p-value of less than 0.05 indicates that
the three demographic areas did not answer the questions in each section in
the same manner. For the purpose of this paper, only Section C for both the
fringe benefits and the remuneration indicated a significant difference
between the three demographic areas in the answered questions. Post hoc
tests were applied to pair-wise compare the demographic areas and
determine where the differences lie. Because the questionnaires represent
the complete population, will indicate the effect sizes of the post hoc tests
will be given
(i.e. p-values of post hoc tests will not be reported).
When the effect sizes for job satisfaction are reviewed, it can be noted that
the effect size for Delhi with Mumbai is d = 0.084, which is small, and
indicates a small, non-practically significant difference. This implies that the
two demographical areas answered the questions in the section about job
satisfaction in the same manner. When the same effect size for Delhi with
Delhi is reviewed, it indicates a d-value of 0.303, which is between the small
and medium intervals on the scale. The value is closer to the small, nonpractically significant difference. For the purpose of this study, this difference
is too small to be considered practically significant. The effect size for
56
Mumbai with Delhi indicates a d-value of 0.426. This d-value is closer to the
practically significant difference value and can be considered practically
significant for the purpose of this paper. The mean values for the three
demographical areas indicate that the employees in Delhi experience an
ever so slightly higher level of job satisfaction than the employees in Mumbai
and Delhi.
When the effect sizes for job engagement are reviewed, it can be noted that
the effect size for Delhi with Mumbai is d = 0.576, which is indicates a
medium, practically significant difference. This implies that the two
demographical
areas
answered
the
questions
in
the
section
about
engagement in two different manners. When the same effect size for Delhi
with Delhi is reviewed, it indicates a d-value of 0.511, which again indicates a
practically significant difference. The effect size for Mumbai with Delhi
indicates a d-value of 0.028. This value is small and indicates a nonpractically visible difference. The mean values for the three demographical
areas indicate that the employees in Delhi are experiencing a lower level of
engagement than the employees in Mumbai and Delhi.
When the effect sizes for fringe benefits are reviewed, it can be noted that
the effect size for Delhi with Mumbai is d = 0.188, which indicates a small,
non-practically
significant
difference.
This
implies
that
the
two
demographical areas experience the same level of motivation from the fringe
benefits on their job satisfaction and engagement. When the same effect size
for Delhi with Delhi is reviewed, it indicates a d-value of 2.078, which is
extremely high on the effect size scale, and indicates practically important
difference. The effect size for Mumbai with Delhi indicates a d-value of 2.469.
This d-value again indicates a high practically important difference. The
mean values for the three demographical areas indicate that the employees
in Delhi experience a higher level of motivation from their fringe benefits
than the employees in Mumbai and Delhi.
When the effect sizes for remuneration are reviewed, it can be noted that the
57
effect size for Delhi with Mumbai is; d = 0.572, which indicates a medium,
practically significant difference. This implies that the two demographical
areas experience a different level of motivation from their remuneration
packages on their job satisfaction and engagement. When the same effect
size for Delhi with Delhi is reviewed, it indicates a d-value of 0.419, which
again indicates practically visible difference. The effect size for Mumbai with
Delhi indicates a d-value of 0.989. This d-value is high, and indicates a high
practically
important
difference.
The
mean
values
for
the
three
demographical areas indicate that the employees in Mumbai experience a

lower level of motivation from their remuneration packages than the
employees in Delhi and Delhi.
A test for differences was done between the various categories of the five
subsections within section D: Age, Academic Qualification, Years Experience,
Level in the Organization and Gender. This was done to determine whether
there were any differences in the levels of job satisfaction, engagement,
fringe
benefits
and
remuneration
for
the
employees
answering
the
questionnaires with different age, academic qualifications, years experience,

level in the organization and gender. These criteria did not form part of the
main focus of the study, thus, they will not be reported to the same level of
detail as the demographical areas.
RECOMMENDATIONS
The effect sizes for the job satisfaction between Delhi and Mumbai indicate a
small, non-practically significant difference. The effect size between Delhi
and Delhi indicate a small, non-practically significant difference. The effect
size for Mumbai with Delhi indicates practically significant. The mean values
for the three demographical areas indicate that the employees in Delhi
experience an ever so slightly higher level of job satisfaction than the
employees in Mumbai and Delhi. These indicators can be used and examined
to determine this is so and to carry these learning events over to Mumbai
and Delhi.
58
The effect sizes for job engagement between Delhi and Mumbai indicate a
medium, practically significant difference. The effect size between Delhi and
Delhi indicates a practically significant difference. The effect size between
Mumbai and Delhi indicates a non-practically significant difference. The
in Delhi experience a lower level of engagement than the employees in
Mumbai and Delhi. These indicators can again be studied to identify the
drivers behind the higher levels of engagement. These drivers can then be
applied to promote higher levels of engagement in Delhi.
The effect sizes for fringe benefits between Delhi and Mumbai indicate a
small, non-practically significant difference. The effect size between Delhi
and Delhi indicate a practically important difference. The effect size between
Mumbai and Delhi indicates a high practically important difference. The
in Delhi experience a higher level of motivation from their fringe benefits
than the employees in Mumbai and Delhi. These indicators can be analyzed
to determine the fringe benefits that cause the employees in Delhi to be
more satisfied. The remuneration packages of the employees in Mumbai and
Delhi can then be amended with the fringe benefits similar to that of the
employees in Delhi.
The effect sizes for the remuneration between Delhi and Mumbai indicate a
medium, practically significant difference. The effect size between Delhi and
Delhi indicates a practically visible difference. The effect size between
Mumbai and Delhi indicates a high practically important difference. The
in Mumbai experience a lower level of motivation from their remuneration
packages than the employees in Delhi and Delhi. These indicators can again
be studied to determine if the employees in Mumbai are under the
impression that they receive market related salaries. These indicators can be
compared with those of the employees of Delhi and Delhi to determine if
changes will be possible in the remuneration of the employees in Mumbai.
59
From the statistical data it can be concluded that all Galaxy employees seem
to be overall satisfied with their fringe benefits and the way that they are
structured to the total cost-to-company packages that are offered to the
different demographical areas. The statistical data also indicates that all
Galaxy employees are overall motivated with an acceptable level of job
satisfaction and engagement. The proposed area that needs to receive
additional focus is that of the cash component of the remuneration package.
In general, the survey report showed that HR professionals perceive several
factors to be more important to employees than the employees did
(Meisinger, 2007:8).
60

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Study to determine the impact of fringe benefits on job satisfaction

Project Title: Study to determine the impact of fringe

Study to determine the impact of fringe benefits on job satisfaction

remuneration packages amongst one another. To determine the appropriate

Study to determine the impact of fringe benefits on job satisfaction

Study to determine the impact of fringe benefits on job satisfaction

Study to determine the impact of fringe benefits on job satisfaction

Employees want benefits: Employees are accustomed to receiving benefit coverage

Study to determine the impact of fringe benefits on job satisfaction

organization are in equilibrium. The organization relies on the manager to evaluate

To determine the importance of fringe benefits amongst employees

Study to determine the impact of fringe benefits on job satisfaction

Study to determine the impact of fringe benefits on job satisfaction

Study to determine the impact of fringe benefits on job satisfaction

Any person (other than a company) who receives any remuneration or to

Any person who received remuneration or to whom any remuneration

Employer: Defined in the Practical Guide to Remuneration Packaging as any person

Study to determine the impact of fringe benefits on job satisfaction

accommodation, or the contribution to paying for his own accommodation.

Study to determine the impact of fringe benefits on job satisfaction

Study to determine the impact of fringe benefits on job satisfaction

JOB AND BENEFIT SATISFACTION

People join a firm because of pay structures

Study to determine the impact of fringe benefits on job satisfaction

Maslowws Needs Hierarchy is illustrated in Figure 1 below:

Study to determine the impact of fringe benefits on job satisfaction

Herzbeerg (19755) suggested a two-step framework to understand employee

Study to determine the impact of fringe benefits on job satisfaction

When in existence, motivating factors could easily contribute to job

motivating factors could include:

Company policy and administration

Study to determine the impact of fringe benefits on job satisfaction

Figure 3 - Maaslow Hierarchy of Needs vs Herzbergs Motivation Hygiene Theory

Study to determine the impact of fringe benefits on job satisfaction

organization (Tropman, 2001:18). It is worth noting that organizations depend on

These false theories are explained by Tropman (2001:18) as follows:

Misunderstanding of the motivational component of performance

Components of performance: The employers obligation towards the

Study to determine the impact of fringe benefits on job satisfaction

performance targets. Employers often overestimate the importance of

According to Tropman (2001:19), management styles can be divided into

Structure of the job: Employers tend to believe that satisfied employees

Satisfiers and dissatisfiers: One of the common mistakes made by

Study to determine the impact of fringe benefits on job satisfaction

dissatisfier and vice versa. Table 1 provides a list of elements that

Company policy and management

Relationship with supervisor

Relationship with peers

Relationship with sub-ordinates

Table 1 - Top Satisfiers and Dissatisfiers according to Tropman (2001)

Workplace culture in conflict: A manifestation of this conflict is the continuous

Study to determine the impact of fringe benefits on job satisfaction

The hierarchy of needs: The needs of an employee can be explained by Maslows

In essence, these seven misunderstandings of Tropman (2001:18), tend to mean

Study to determine the impact of fringe benefits on job satisfaction

Health x Maternity/Family leave

Release time for continuing education or professional meetings

According to Williams (1995:1098,) benefit satisfaction is important for two reasons:

Benefit satisfaction is of theoretical importance because of its potential links

Benefit satisfaction may be related to various behavioral attitudes such as

Study to determine the impact of fringe benefits on job satisfaction

goes hand in hand and make up the total compensation package.

The individuals involvement and satisfaction as well as enthusiasm for work